1. As a Muslim we should know that when Allah SWT sent us in this world, he gave us certain instructions called "deen" which is a complete way of living.

2. As Muslims we must have faith that whatever Almighty has instructed us to do, is in our favour either individually or collectively.

3. Riba of any sort is Haram and is declared to be a War with Allah Almighty. A number of jurists have discussed a lot on this issue and the issue now stands resolved as far as the perspective of Sharia scholars is concerned, that the modern day interest falls within the definition of Riba.

4. Our Deen also provides us with the instructions on an overall socio-economic system. This system includes various instruction on the modes of contract law, partnership law, taxation laws, sales of goods and other commercial laws. It is not silent on any of the aspect of human life and we are obliged to abide by these instructions individually and collectively.

5. Now coming to the matter of interst, as to why it is Haram and why it is considered to detrimental to the society.

6. The first thing is its social effect that it makes people greedy and loving the money. This effect has numerous social and ethical side-effects also.

7. From economic point of view, this has proved to be detrimental to the collective benefits of the society. If we define interest in purely economic terms, we can say that "it is generation of wealth during a specific period, without any productive activity".

8. Now imagine that irrespective of the performance of other productive factors, the owner of one factor i.e. capital is asking that "you have to give me fixed return, irrespective of whatever gets produced". There is no guarantee that even any productive activity would take place or not. On the contrary he is not taking any risk at all. Does it seem justifiable.

9. Most important thing to note is that since the interest mandates generation of wealth without any productive activity, IT HAS BEEN PROVED TO BE THE PRIME CAUSE FOR "INFLATAION". For this purpose you may consider to study a number of books and papers that have actually diagnosed the capitalist system, fairly in detail and in an analytical manner. How funny is that now people justify its siginficance, because of INFLATION, whereas actually it is the prime cause of inflation.

10. Notwithstanding this selfish, greedy and cruel approach, Islamic financing options are either trade based, rent based or profit and loss sharing based. All these modes are actually based on real factors of production i.e. land, tangible assets and enterprenuer's skills and experience.

11. In all these basis, the financer really takes the risk of loss whereas it is always ensure that some commercial and economic activity is actually underlying these transaction. Accordingly, these are just and equitable bases for business financing.

12. Last but not the least, these all things work ideally in a complete Islamic society, which is currently not present. Islamic banking and finance is just a facet of the same. Nevertheless, we should ensure that we are striving towards development of an Islamic society, individually and collectively. We should further ensure that we are avoiding the interest and all other non-permissible transactions in our individual lives either through avoiding them at all or by using Islamic financial institutions as an alternate.

i would like all of u to read a book on "Riba" by Maulana Moudoodi.
i have read this book and have no doubt that interest in any of its form is HARAM. the best thing about this book is that its not written in a traditional way EITHER DO IT OR U R KAAFIR, all the arguments are backed by different rations aspects and logic and with diff dimensions.

unfortunately i dont have enough time to summarise the crucks of that book, and i recommend all of u study and understand it urself.

with regards to the original question that why ineterest is Haram when inflation exists in the economy, my firend as u r a student of accountancy/economics u would know that Interest is ONE of the fundamental causes of INFLATION. i do agree that neither parties (lender and borrower) should suffer, in that case there is a very simple solution that whenever Mr X wants to lend money he should back the value of Loan with some commodity whose value is stable for eg gold, silver, or anything stable in his country's economy, in such a case neither party will suffer.

now u would say money itself is backed up by gold reserves in the central/state bank, the answer to this is NO, no country in this world back up 100% of issued currency by gold reserves, infact it is even less than 10% in most countries. u know Currency itself has no intrinsic value, it is just a piece of paper which cannot depreciate, that is why RENT is HALAL and RIBA is haram.

another dimension to support my argument is that Islam is also a Social Religion and puts great emphasis on helping poor people. if i ask u to lend me 100,000 rupees u will reject me staright way, why? because u dont have 100,000 rupess, similarly, lenders only lend that part of money which is surplus to them, Islam being a social religion encourages rich people to lend their surplus funds on a non-interest basis.

i have got many strong points, but the time doesnot allow me to write.

plz do read the above mentioned book and i m sure all queries re ineterest will be resolved.

Asalamuallaikum
azeem khan ....... your views are worth saluting......
thats should me the appraoch now when people are arguing about the interest people will in future put farward such economical reasons to prove that wine and pork is halal ANOUZUBILLAH
may ALLAh give these people hiddayat
Ammen
Sohaib Ahmed

one thing more i will like to add
tell me one thing people.....
when your rules and sections in INCOME TAX ORDINANCE Says something you believe it and apply it acordingly without arguing for logic....
similarly with other standards and Auditing....
BUT WHEN HOLY QURAN THE BOOK OF GUIDANCE SAYS SOME THING
YOU ARGUE It.
MAY ALLAH GIVEYOU PEOPLE HIDAYAT
(this was put farwards by my teacher KP)
ALLAH HAFIZ

Thanks for appreciating my views. Please forward my salaam to KP, who was my teacher as well some time back.

i slightly disagree with u on the ARGUMENT thing. i believe one should argue everything no matter what it is, not because WE have doubts about the authenticity but because argument forces u to think and when u think - u come to know the deeper understanding of the book.

this is particularly important when u face non-muslims, u have to know the logic behind every verse of QURAN so u can convince them why Islam is the only SENSIBLE religion.

not only re Interest, we should also think of other aspects of Islam and i can assure u that u will be able to come up with extremely sound reasonings.

there are thousands of reason WHY INTEREST / RIBA IS HARAM.
as i suggested in my earlier msg, please read a book called "Sood" by Maulana Maudoodi. It will clearify most of your points if not all.

i can answer all ur questions but unfortunately time doesnt permit me to do that. secondly i simply dont like talking in the air, i would like my views to be backed by sound logics and reasoning and for that i need to refer to various books.

there are thousands of reason WHY INTEREST / RIBA IS HARAM.
as i suggested in my earlier msg, please read a book called "Sood" by Maulana Maudoodi. It will clearify most of your points if not all.

i can answer all ur questions but unfortunately time doesnt permit me to do that. secondly i simply dont like talking in the air, i would like my views to be backed by sound logics and reasoning and for that i need to refer to various books.

being away from Pakistan i dont know what Al-Meezan bank does, however, i can definitely find out what they do or whether it is haram or halal.

here i would like to point out a fact that I have heard similar kind of responses from many people that if interest is haram then why
Al-abcxyz bank pay interest. we must understand that by putting "AL-" before any name doesnot mank a COMMERCIAL (interest paying) bank to a Islamic bank. we should also note that if a so-called islamic bank pays interest and calls it mark-up, profit or whatever it doesn't mean that rule about riba is wrong.

interest has nothing to do with what banks or muslims do, if u read my first msg u will find some very basic points why INTEREST IS HARAM and if u want to know more about it then please read a book "SOOD" by Maulana Maudoodi.

if u know the answer to ur question then please also enlighten our minds.

being away from Pakistan i dont know what Al-Meezan bank does, however, i can definitely find out what they do or whether it is haram or halal.

here i would like to point out a fact that I have heard similar kind of responses from many people that if interest is haram then why
Al-abcxyz bank pay interest. we must understand that by putting "AL-" before any name doesnot mank a COMMERCIAL (interest paying) bank to a Islamic bank. we should also note that if a so-called islamic bank pays interest and calls it mark-up, profit or whatever it doesn't mean that rule about riba is wrong.

interest has nothing to do with what banks or muslims do, if u read my first msg u will find some very basic points why INTEREST IS HARAM and if u want to know more about it then please read a book "SOOD" by Maulana Maudoodi.

if u know the answer to ur question then please also enlighten our minds.

Please try to go through the Page 2 of this thread... You'll find my answer there...

Shariah allows payment of interest as long as it complies with Shariah terms, just like Al-Meezan Bank operates (and also all other Saudi banks)... I have talked to various religious individuals who have proper knowledge about Islamic Economics... And they all have approved that Al-Meezan Bank's operations are in compliance with Islamic Economics.

Please try to go through the Page 2 of this thread... You'll find my answer there...

Shariah allows payment of interest as long as it complies with Shariah terms, just like Al-Meezan Bank operates (and also all other Saudi banks)... I have talked to various religious individuals who have proper knowledge about Islamic Economics... And they all have approved that Al-Meezan Bank's operations are in compliance with Islamic Economics.

cant find the second half of ur msg...

could u plz elaborate what kind of interest COMPLIES with sharia law or ask ur friends who KNOW islamic economics and ASSURED u that interest given by Al-Meezan bank or Saudi banks is halal.

I hope you'll find all the answers there... I would love to explain but my vague writing skills wouldn't do justice to the topic... However, I would still be pleased to explain myself if you have any other queries.